Who it is for
- Owners with a low-rate first mortgage
- Renovations and large expenses
- Flexible access to cash over time
Typical HELOCs & Home Equity Loans requirements
| Max combined LTV | Typically 80–90% |
|---|---|
| HELOC rate | Usually variable |
| Home equity loan rate | Fixed |
| HELOC draw period | Often 10 years |
Figures are typical market ranges as of October 2026. Actual terms depend on the lender, your credit, the property and the program, and are confirmed on your Loan Estimate or term sheet.
How it works
- Appraise or value the home.
- Lender sizes the line to the combined LTV limit.
- Close and draw as needed (HELOC) or receive a lump sum (home equity loan).
Try the Cash-Out Refinance Calculator
Pros and cons
Advantages
- Keeps your first mortgage rate
- Lower closing costs than a refinance
Trade-offs
- Variable rates can rise
- Second lien on your home
Documents you’ll need
- Mortgage statement
- Income documents
- Homeowners insurance
HELOCs & Home Equity Loans FAQ
HELOC or cash-out refinance?
If your first mortgage rate is low, a HELOC keeps it. If your rate is high, a cash-out refinance may lower it while giving you cash.
How much can I borrow with a HELOC?
Most lenders cap total borrowing (first mortgage plus HELOC) at 80 to 90% of your home value. On a $500,000 home with a $300,000 mortgage, that is $100,000 to $150,000.
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving line you draw from as needed, usually with a variable rate. A home equity loan is a lump sum with a fixed rate and fixed payment.
Are HELOC rates fixed or variable?
Usually variable, tied to the prime rate. Some lenders let you lock portions of the balance at a fixed rate.
What is the draw period?
Typically 10 years of drawing and interest-only-ish payments, followed by a repayment period (often 15 to 20 years) where you pay down the balance.
What are HELOC closing costs?
Often much lower than a refinance, sometimes $0 to $2,000. Many lenders cover costs if you keep the line open a few years.
Can I get a HELOC on an investment property?
It is harder. Most HELOCs are for primary homes. Investment property seconds exist but with lower LTV caps and higher rates.
What credit score do I need for a HELOC?
Typically 620 to 680 minimum, with the best rates at 700-plus and lower combined LTVs.
Is HELOC interest tax deductible?
It can be, if the funds are used to buy, build or substantially improve the home securing the loan. Consult your tax advisor.
Official sources
How HELOCs & Home Equity Loans compare
| HELOCs & Home Equity Loans | Cash-Out Refinance | Rate-and-Term Refinance | |
|---|---|---|---|
| Best for | Owners with a low-rate first mortgage | Paying off high-interest debt | Rates dropped since you bought |
| Down payment | , | , | , |
| Credit | , | , | , |
| Income docs | , | , | , |
Typical ranges, your Loan Estimate or term sheet confirms actual terms.
Coming soon: a 2-minute walkthrough from our loan team.
Related programs
Cash-Out Refinance
A cash-out refinance replaces your current mortgage with a larger one and pays you the difference in cash, commonly up to 80% of your home’s value on a primary residence.
Rate-and-Term Refinance
A rate-and-term refinance replaces your mortgage with a new one to change the rate, the term or the loan type, without taking cash out.